Tax relief is available to companies and organisations throughout the creative industries. Sara Andrews' tax specialist at Haines Watts' explains how struggling smaller art galleries' museums' theatres and orchestras can make sure they are benefiting from support in future.
Arts and culture have experienced an exceptionally turbulent year with many projects struggling to make ends meet. While a Government handout went some way towards helping’ a significant divide emerged between those exhibitions’ art galleries and other live performance companies that could and couldn’t claim for support. On the one hand’ lots of major exhibits and attractions have had the financial clout to innovate during the pandemic. Allowing them to find new ways to reach audiences – either by digitising their offering enabling people to view’ visit and participate online’ or by expanding their offering to take their shows out on the road. Such organisations could be able to make claims for tax relief against much of that activity. However’ we work with smaller organisations’ too. Art galleries’ museums and community-scale theatres that have had to close their doors and furlough staff’ who don’t have the financial power to diversify.
Visibility is everything
For those smaller organisations’ the road to recovery might not be so clear. Even though easing restrictions should bring visitors and audiences back through their doors’ they have lost 18 months’ worth of momentum’ of visibility’ and of income. Meaning they haven’t been able to invest in new exhibitions’ and therefore won’t be able to claim associated tax relief. We want them to be able to invest in new shows and new exhibits that will grab attention and bring audiences back in – and to do so knowing they could potentially claim 25% of their expenditure back. The Creative Industries Tax Reliefs can be a crucial lifeline and one that we would urge creative organisations to bear in mind when they are planning for the years ahead.
What are Creative Industries Tax Reliefs?
Creative Industries Tax Reliefs are available to help some of the sectors that have been hit hardest by the pandemic’ including the Theatre’ Orchestra’ Animation and Museum and Galleries sectors. We’ve seen the number of claims for the various reliefs rising year on year: since 2007′ there have £4.5bn-worth of film tax relief paid out. In the year ending March 2021′ £380m was paid in highend television programming relief and over 2’900 exhibitions have been supported since 2017. But despite this uplift there are still a huge number of organisations missing out’ with claims still much lower than Government predictions’ especially when it comes to Museums and Galleries Exhibitions Tax Relief (MGETR).
Museums and Galleries Exhibitions Tax Relief
MGETR was introduced in April 2017 to support museums and galleries in developing new exhibitions. The relief works by enhancing expenditure incurred in the exhibition process. With some of our beloved museums having closed their doors for half of the year and visitor numbers being limited’ museums and galleries should consider if they are eligible to claim reliefs for 2020 and previous years. Museums and Galleries Tax Relief (MGTR) is not open to commercial companies’ instead’ it’s available to newly-developed exhibitions’ either temporary or permanent’ produced by charitable companies’ their trading subsidiaries’ or companies wholly owned by local authorities.
Theatre Tax Relief
With social distancing measures having delayed many productions’ Theatre Tax Relief can be the cash injection production companies are looking for at the moment. And as they say’ the show must go on’ so if you’ve had to create your production as a live stream event this year’ as long as it meets the commercial obligations’ you could still be eligible to receive the relief.
Exploring Creative Tax Reliefs
It’s not just about exploring the possible cash that could be locked in your business right now’ but also to ensure any claims you have made previously or are in the process of making have been fully maximised.
